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With 40% of global palm oil being produced by smallholders, our supply chain is complex. For the last 10 years, we have been using a combination of tools to ensure that the key forest-risk commodities we buy are not linked to deforestation. To date, 85% of our palm oil supply is considered responsibly-sourced and we are committed to continue working towards the 100% target. The palm oil we source comes through 88 suppliers, originating from at least 1,672 mills in 21 countries, namely Malaysia and Indonesia, and some originating from across Latin America, Africa, and other parts of Asia.
To facilitate our goals, we work together with our direct suppliers to continuously improve the sustainability practices of our upstream suppliers, all the way up to smallholder farmers. We also work with partners such as Earthworm Foundation to conduct supplier assessments and identify gaps. This leads to the development of action plans with milestones and deadlines to act upon risks and improvement opportunities identified during assessments. We also abide by the strict policy guidelines of our Nestlé Responsible Sourcing Standard.
Commitment to No Deforestation &
No Peat Development
In 2010, we made a ‘deforestation-free’ commitment for our supply chains, stating that all our products, globally, will not be associated with deforestation by 2020. For the last 10 years, we have been using a combination of tools, including supply chain mapping, certification, satellite monitoring and on-the-ground verification, to make deforestation-free palm oil a reality.
We have partnered with Airbus and the Earthworm Foundation to implement Starling, a satellite-based service, to monitor 100% of our global palm oil supply chains from 2019. Through satellite imagery, we can identify deforestation patterns as well as the parties involved and to take action where necessary. This is fully documented in our palm oil Transparency Dashboard report.
At the end of 2020, we were able to verify that 70% of the palm oil we source comes from lands not deforested after December 31, 2015. We will continue to work with smallholder farmers and large suppliers alike to close the gap towards achieving our goal of 100% responsibly-sourced palm oil.
Supporting Smallholders
We work with Earthworm Foundation for our global Rurality initiative which aims to include more smallholders in our supply chains while developing their resilience and capability to produce responsibly. These projects create value for everyone along the supply chain: smallholders, mill operators, dealers, suppliers and Nestlé. Depending on the area, these initiatives focus on efficiency, self-sufficiency, diversification, innovation and infrastructure.
In 2020, over 200 farmers in Sabah took part in five webinars discussing topics such as crop deliveries, government aid, COVID-19, farm productivity, wildlife conflict management, sustainability practices, and income diversification opportunities. Despite the pandemic, the Rurality project supported 61 smallholders in 2020 to obtain the Malaysian Sustainable Palm Oil (MSPO) Certification.
Since the project began in 2016, 291 farmers have benefitted from the MSPO process and 85 have been certified. We also introduced an alternative livelihoods programme to help smallholders build resilience to changes in the market. The programme helps to establish farmer groups, and provide support for market connections for alternative livelihood activities such as handicrafts, goat rearing, bee farming and bird nest production.
The Rurality project also involved easing human-elephant conflict in Sabah, which arises when elephants forage on agricultural land due to the loss of their natural habitats. This initiative protects elephants, an endangered species, by monitoring 7,580 hectares of land in conflict with elephants.
Respecting Human Rights
Respecting human rights is a way of life for us. To address labour rights challenges, our ongoing action plan on labour rights in palm oil supply chains enables us to strengthen our supplier management systems.
In partnership with one of our key suppliers, Sime Darby Plantation Berhad, in 2019, we piloted a worker voice system, co-developed by the Responsible Business Alliance and solution developer, Elevate, to create a safe reporting helpline for palm oil workers in Malaysia to report human and labor rights abuses. We aim to expand this programme across all facets of our supply chain.
In order to support local palm oil producers in enhancing transparency and identifying potential risks in their recruitment process, we also took part in the development of a Human Rights-Based Due Diligence Tool on Ethical Recruitment.
We are conscious of the plight of the children of migrant workers living on oil palm plantations. Most of these children are undocumented and have minimal access to essential needs, including education. To support them, we continued working with the Earthworm Foundation, publishing a Child Risk Assessment Framework aimed at helping palm-growing companies to identify the common risks faced by children living in plantations and develop appropriate intervention strategies and preventive measures to mitigate these risks.
